Solyndra

Solyndra's 2011 bankruptcy became a political symbol of government investment failure, but the company's collapse was fundamentally a mechanism failure of technology betting. Solyndra developed cylindrical solar panels that captured light from multiple angles without tracking—an elegant solution that assumed silicon prices would remain high. When Chinese manufacturers crashed silicon prices by 90%, Solyndra's technological differentiation became a liability rather than an advantage. The company's mechanism failure was path dependence on the wrong technology trajectory. Solyndra had invested hundreds of millions in manufacturing equipment optimized for cylindrical panels. When flat panels became dramatically cheaper, Solyndra couldn't pivot—its entire production infrastructure was specific to a technology the market no longer wanted. This is the biological equivalent of an organism that specialized for a food source that disappeared. The $535 million government loan guarantee that made Solyndra famous accelerated rather than caused the failure. The capital enabled the company to scale manufacturing before validating that its cost structure could compete. When Chinese silicon prices collapsed, Solyndra had large manufacturing capacity producing products that cost more than competitors' alternatives sold for. The company became a case study in how government industrial policy can fund companies past the point where market signals would have stopped them. Solyndra's assets were sold at bankruptcy for pennies; no buyer wanted cylindrical panel manufacturing equipment.